People & Culture
6 minute read

Why unlimited holiday is a dangerous idea

Person planning for holiday
Unlimited holiday sounds great - a tempting perk to attract great talent, and a way to show your people that you trust them. Unfortunately, in reality it can backfire badly, causing stress and worry. Here’s what you should try instead.   

Telling employees that they can take as much holiday as they want should make sense. Instead of obliging people to jump through administrative hoops and juggle family and work commitments, they can simply use their judgement and take the time they need.  

Some companies might worry that people would take unfair advantage of this policy - but Patty McCord, Netflix’s former Chief Talent Officer, makes the case that if you “hire, reward and tolerate only fully formed adults”, then your employees will have the common sense to take reasonable holidays - without exploiting the company or going AWOL for weeks at a time.  

Nor do you really need to worry about the number of hours people are clocking in every month. “Hours worked doesn’t usually correlate with performance for knowledge workers,” points out Emma Brudner, Director of People at 

In fact, unlimited holiday time should increase the quality of the work being done. Studies consistently show that post-vacation employees show up to 80% higher performance.   

So what’s the problem?

The issue with unlimited holiday isn’t that people take too much time off - it’s that they take too little. Facing too much choice, employees feel under social pressure to skip the holidays altogether.  

Part of the issue is a lack of established norms. Employees don’t want to do the “wrong thing” or face criticism from their teammates. Without standardised policies, every decision becomes personal. Managers may feel uncomfortable refusing holiday requests at inconvenient times - after all, their direct reports have been promised “unlimited” holidays, so placing any limits feels personal.  

In addition, even if everyone is entitled to unlimited holidays, those with higher salaries can afford more trips. As a result, the higher paid staff are more likely to take advantage of the perk, leaving those on a lower wage to pick up their slack.  

Unlimited holidays become even more of an issue when you’re working remotely. While an employee might be spotted coming into work on Christmas Day and told to take a break, it may not be as easy to spot an overworking remote worker.  

On top of this, remote workers might decide to work from their holiday destination and not fully switch off. This temptation, combined with a lack of clarity around holiday expectations, can place employees at serious risk of burnout 

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If unlimited holidays are a dangerous idea, what can companies do instead?

Here are five suggestions for encouraging employees to take appropriate breaks, avoid burnout and recharge regularly:   

1. If your business has slow seasons (such as August or December), allow employees to take as many holidays as they want during those times - as long as enough employees are in place at any given time to provide minimal customer support. 
2. Create a “mental health day” policy - either as part of your sick day policy or as a separate policy. Sanctus, a mental health and wellness start-up, has provided some helpful guidelines, but the essence of their policy is that if you judge that you can’t show up to work because of your mental health, then you can take time off in the same way as you would a sick day.   
3. Require all employees to take a minimum number of holidays per quarter and per year, with no option to roll them over into the following year. 
4. Lead from the top - make sure that all managers take their holidays, and stress the importance of work/life balance as part of your working culture. Build discussions about holiday time into your 1:1 conversations - managers should ask their employees questions about when they will be taking their holidays and encourage them to take those days off. 
5. Consider reducing your employees’ weekly workload, instead of insisting on regular breaks. Many businesses believe that the time has come to try a 4-day work week - but be careful that this doesn’t turn into 40+ hours crammed into 4 days instead of 5.   

The idea is sound - knowledge workers benefit from frequent breaks and placing trust in our employees will increase their engagement and motivation levels. But in practice, a more mindful approach to holiday policies can help employees be healthier, happier - and more productive!